Social Media Fraud—Forewarned is Forearmed

Social media fraud is increasingly an unfortunate reality of life. According to the National Fraud Intelligence Bureau, UK cybercrime in total cost over £3 billion in the year to March 2022, with more and more incidences of social media fraud.

Efforts are being made to address this worrying statistic. However, our industry regulator the Financial Conduct Authority (FCA), the police and even the UK Government are currently facing challenges convincing social media platforms to take greater responsibility for financial crime prevention. In the meantime, you can take steps personally to raise your awareness and thus protect your assets.

Keeping safe – some general rules

Over the years we have written articles about Keeping your wealth safe from scammers and How to be better protected from financial crime in support of FCA resources such as ScamSmart, which directs to information on common scams and encourages consumers to make use of:

• The FCA Warning List – where you can check for firms suspected of scam activity; and
• The FCA Register – where you can verify that individuals with whom you are in contact are, in fact, employed by an FCA authorised and regulated firm – noting that only the contact details supplied on the FCA register should be used to get in touch with firms.  

Safety on social media

To protect yourself on social media there is no substitute for a healthy sense of scepticism when dealing with those purporting to be financial services businesses. In addition, we would always recommend:

• Being careful about sharing any details on social media. This includes photos where your passport or other personal details may be evident, or images of your home address.
• Setting up multifactor authentication. This is important for your financial accounts (especially if accessed from a smartphone) but also for accessing social media accounts.
• Being wary about using public Wi-Fi networks. In general, we wouldn’t recommend you use them, but if you do, make sure you are not inputting vital personal details.

In particular, the FCA warns about ‘clone firm’ investment scams, where fraudsters set up fake company websites and then try to extract money from investors by posing as legitimate contacts. This is very similar to fraudsters setting up fake social media profiles and claiming to represent legitimate firms. In either case, again, we encourage any would-be investors to check the FCA Warning List and FCA Register to avoid being duped.

Spotting when something isn’t right

Fraudsters act in a variety of ways to try and catch you off guard (as we explain further in our articles above) but it’s worth noting any combination of these behaviours:

1. Unexpected contact – Traditionally, scammers cold call, but contact can also come from online sources such as email or social media, by post or word of mouth, or even in person at a seminar or exhibition.
2. Time pressure – They might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.
3. Social proof – They may share fake reviews and claim other clients have invested or want in on the deal.
4. Unrealistic returns – Fraudsters often promise tempting returns that sound too good to be true, such as much better investment returns than elsewhere.
5. False authority – Using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.
6. Flattery– Building a friendship with you to lull you into a false sense of security.

How we reassure clients

Given our dedication to security in this environment of prevalent cybercrime, there are certain things we do and most certainly would not do as we deal with clients on a day-to-day basis.

• We never get in touch with our clients – or those who register with us – through social media platforms.
• We never request personal data or security information by email.
• We pay close attention to the latest fraudulent trends, by actively monitoring for suspicious activity and by frequently catching up with others in the industry to counter emerging threats.
• Your money is always protected. All client assets are separately custodied and ring-fenced, and our security procedures (both around accounts and infrastructure) are validated regularly by external security experts.

Being vigilant

Being highly vigilant on behalf of our clients is what you should expect when dealing with us – a similar attentive approach informs how we invest and how we strive to improve consumer outcomes.

But as we all navigate a fast-changing electronic ecosystem we must be prepared to question more, to be super cautious with the information we share, and which we may unknowingly put into public spaces.

Please get in touch if you have any queries about how our approach could benefit you.

Please note, the value of your investments can go down as well as up.